What is holding the dashboard back?

The employ­ment mar­ket has changed dra­mat­i­cal­ly over the past two decades. No longer can a work­er expect to spend their entire career at one employ­er. Work­ers may even have sev­er­al careers dur­ing their work­ing life. As a result, it became appar­ent that mil­lions of UK work­ers were not sav­ing enough, if any­thing at all, for their retire­ment. So, in 2012, the UK gov­ern­ment intro­duced auto-enrol­ment.

This required employ­ers to place most of their employ­ees in a qual­i­fy­ing pen­sion scheme. As of March 2019, there were more than ten mil­lion more indi­vid­u­als sav­ing for a pen­sion than before the launch. But more jobs means more pen­sion funds per indi­vid­ual. There was a dan­ger there could be a pro­lif­er­a­tion of orphaned funds as work­ers left jobs and lost track of their pen­sions. So the idea of a pen­sions dash­board was born.

What is the pensions dashboard?

The con­cept of a pen­sions dash­board is sim­ple: it is an online search engine that enables con­sumers to find old pen­sions they have lost track of and in the­o­ry under­stand how much they have saved in them.

The ini­tia­tive was for­mal­ly announced in the 2016 Bud­get with the gov­ern­ment  propos­ing it would launch a pen­sions dash­board that was designed and fund­ed by the indus­try by 2019.

This first dead­line was seem­ing­ly lost between Brex­it and a change of admin­is­tra­tion. By last year, Depart­ment for Work and Pen­sions had tak­en con­trol and giv­en the Mon­ey and Pen­sions Ser­vice the respon­si­bil­i­ty of deliv­er­ing the project.

Deliv­er­ing new tech­nol­o­gy sys­tems is nev­er sim­ple and the pass­ing of the orig­i­nal dead­line result­ed in claims that the indus­try has dragged its feet on keep­ing pace with tech­nol­o­gy. Coro­n­avirus has cer­tain­ly giv­en notice to the pen­sion sec­tor that any who resist the har­ness­ing of tech­nol­o­gy “need to stop pro­cras­ti­nat­ing and just get on with it”, says Les­ley Car­line, direc­tor of KGC Asso­ciates and pres­i­dent of the Pen­sions Man­age­ment Insti­tute.

But she says the notion of the pen­sions dash­board project being delayed is a mis­con­cep­tion. Although the Pen­sion Schemes Bill has been delayed, the project is con­tin­u­ing and, like a lot of large projects, will take time, she says.

There is always a note of cau­tion when we talk about tech­nol­o­gy being the answer to every­thing and that note is data

The Pen­sion Schemes Bill, once passed, requires every pen­sion scheme and provider to have a suit­able tech­nol­o­gy solu­tion that will pro­vide dash­board users with access to their data. There are, how­ev­er, a num­ber of chal­lenges that must be addressed.

“There is always a note of cau­tion when we talk about tech­nol­o­gy being the answer to every­thing and that note is data,” says Car­line. “Unless the data is there and acces­si­ble, tech­nol­o­gy is use­less.”

Planning for digital architecture

Pen­sions are no dif­fer­ent to oth­er branch­es of finan­cial ser­vices when it comes to prob­lems with data. Accu­ra­cy, reli­a­bil­i­ty, secu­ri­ty and whether it can be accessed eas­i­ly, with­out adding the delay and cost of human inter­ven­tion, are as rel­e­vant to bank­ing and insur­ance as the pen­sions dash­board project.

The mat­ter of data stan­dards – hav­ing all providers singing from the same hymn sheet – is cur­rent­ly being addressed and good progress has been made, despite the dis­rup­tion of COVID-19. But there are more fun­da­men­tal con­sid­er­a­tions for those man­ag­ing this data.

“Put sim­ply, can you han­dle the data?” asks Chris Con­nel­ly, who is the propo­si­tions and solu­tions direc­tor at tech­nol­o­gy and out­sourc­ing provider Equini­ti, and as a data expert is rep­re­sent­ing the Pen­sions Admin­is­tra­tion Stan­dards Asso­ci­a­tion in its work with the dash­board project.

Many, and in par­tic­u­lar pen­sion schemes, should not focus on their own mem­ber­ship, but look at the over­all size of the mar­ket. “Every­one who goes to a dash­board will gen­er­ate a search, so you must con­sid­er the over­all usage,” says Con­nel­ly.

If the dash­board is a suc­cess and mil­lions of indi­vid­u­als use the dash­board a year, will your organ­i­sa­tion be able to han­dle that in house or will you need to work with a tech­nol­o­gy part­ner to man­age that traf­fic?

The challenge of data standards

Data qual­i­ty issues will not only impede the process of ser­vic­ing dash­board requests, but increase the cost of pro­vid­ing respons­es. The data must be found, pro­vid­ed in a spec­i­fied for­mat so it can be pre­sent­ed to a con­sumer in a way for them to under­stand their pen­sion sav­ings.

But once the data stan­dards are set, there is no guar­an­tee that the assump­tions used to arrive at the data will be stan­dard­ised to pro­vide con­sumers with infor­ma­tion they will under­stand.

This is a major con­cern for for­mer pen­sions min­is­ter Baroness Ros Alt­mann, who fears that with­out sim­pli­fied stan­dard, there is lit­tle chance of deliv­er­ing a mean­ing­ful con­sumer dash­board. A mean­ing­ful dash­board for Lady Alt­mann would include fig­ures that a con­sumer can either under­stand or trust to make an informed deci­sion about their retire­ment sav­ing.

But how will that be achieved when there is no con­sen­sus on stan­dar­d­is­ing the sim­plest of paper- based pen­sion state­ments?

“A dash­board would poten­tial­ly help con­sumers, but it needs to be accu­rate and intro­duced in a way that con­sumers can be con­fi­dent in secu­ri­ty and reli­a­bil­i­ty,” says Lady Alt­mann. “Stan­dard­ised sim­pler state­ments, sim­pli­fied ter­mi­nol­o­gy, bet­ter finan­cial edu­ca­tion and more guid­ance or advice will be need­ed to deliv­er a new approach that con­sumers can relate to.”

A future for financial wellbeing?

Before COVID-19, a grow­ing num­ber of employ­ers had begun to evolve their ben­e­fit struc­tures. They were mov­ing from spe­cif­ic mile­stones such as retire­ment to encom­pass a holis­tic approach and focus­ing on how finances affect­ed not only wealth, but the men­tal and phys­i­cal health of their employ­ees.

Pro­grammes usu­al­ly focus on clear­ing debt and set­ting goals for short-term sav­ing. The ulti­mate objec­tive is to give the indi­vid­ual not only sight of poten­tial objec­tives, but empow­er him or her to achieve them. Some believe pen­sions dash­boards will only suc­ceed if they are inte­grat­ed into con­sumers’ every­day finan­cial deal­ings.

“If it links with open bank­ing and bank­ing or bud­get­ing apps, and we can inte­grate patient infor­ma­tion with mon­ey infor­ma­tion, it will become more main­stream, says Sir Steve Webb, for­mer pen­sions min­is­ter and part­ner at LCP. But this remains a long-term project, he says, and we are years away from achiev­ing that lev­el of engage­ment.

Helping consumers plan for retirement

But dash­boards present the oppor­tu­ni­ty to trans­form the way peo­ple inter­act with their pen­sion, mak­ing it sim­ple and easy for them to find out basic infor­ma­tion at the touch of a but­ton or stroke of a key.

Devel­op­ment has been slow, but progress is now being made in cre­at­ing the dash­board ecosys­tem, and this momen­tum must be main­tained, says Dar­ren Philp, direc­tor of pol­i­cy and com­mu­ni­ca­tions at tech­nol­o­gy busi­ness Smart Pen­sion. “This project does­n’t have to be a moon­shot,” he adds. “Start­ing sim­ple and get­ting basic infor­ma­tion to peo­ple that they can use to help plan their retire­ment would be a pos­i­tive first step.”

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